Looking for Clarity when it comes to Pension Death Benefits?

While the UK’s pension death benefits regime is extremely generous, it is very misunderstood by savers. Subsequently, increasing numbers of pension savers are missing out on the ability to cascade pension wealth efficiently when they die.

This is bad news when you consider that the way you decide to manage your pension will affect what you can do with it when you are no longer around. Whilst it might not be easy to talk about, the way that you eventually pass on your pension, will impact those closest to you the most, for example, your spouse, children or other family members.

In April 2015, the tax rules were changed to give people greater access to their pensions. This led to a dramatic change in the taxation of pension death benefits and the flexibility to cascade pension wealth efficiently. This coincides with a time when more and more customers are facing tax issues on death. All of this makes pension death benefit planning even more important.

A recent survey carried out by AJ Bell, found that of the 985 UK adults surveyed, the clear majority (58%) admitted they had no idea how their pension would be taxed and passed on after they died. This lack of knowledge is not limited to the taxation of death benefits – only 7% of respondents were able to correctly identify that their pension provider has discretion over where their pension is paid on death (albeit considering their nominated beneficiaries).

Most concerning, almost a third (32%) of respondents had not nominated a beneficiary at all.



Source: 2017 AJ Bell Survey


At McCrea Financial Services, we understand the importance of regularly reviewing nominations with our clients, particularly when family circumstances change. Our job is to simplify this often complex area and help you ensure payouts are made tax efficiently to your family.

Find out how we can help ensure you make the most of your pension here.

If you would like to arrange an initial free no-obligation meeting you can do so by calling us on 0141 572 1340 or via email.

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